Zhongwei Semiconductor plans to invest 160 million yuan to increase its capital in Zhuhai Boya, which has been incurring losses for three consecutive years.

Microchip Technology Announces Investment in Zhuhai Boya Technology

On March 22, Microchip Technology (SH688380, stock price 45.36 RMB, market value 18.16 billion RMB) announced that, due to strategic planning considerations and the company’s need to accelerate the development of its storage chip business, it plans to invest 160 million RMB of its own funds to increase its stake in Zhuhai Boya Technology Co., Ltd. (hereinafter referred to as “Zhuhai Boya”). After the transaction is completed, the company will hold a 20% stake in Zhuhai Boya, making it an equity affiliate.

The announcement states that Zhuhai Boya was founded in 2014 and is a chip design company established with the participation of overseas returnee PhDs. It mainly focuses on the research, design, promotion, and sales of NOR Flash storage chips, operating with a fabless, lightweight asset model. The company has successfully launched NOR Flash products based on ETOX and SONOS process structures ranging from 65nm to 40nm, used in consumer electronics, industrial control, communication devices, automotive electronics, and other fields.

However, the “Daily Economic News” reporter noted that, in terms of revenue scale and market share, Zhuhai Boya still lags behind industry leaders such as Winbond, GigaDevice, and Macronix. Financial data shows that from 2023 to 2025, Zhuhai Boya is expected to achieve revenues of approximately 180 million RMB, 170 million RMB, and 197 million RMB, respectively, with gross profit margins of -14.24%, 4.10%, and 12.39%. Overall, Zhuhai Boya is a relatively small company with gross margins below the industry average.

In terms of profitability, Zhuhai Boya has been in a loss state for three consecutive years from 2023 to 2025, with net losses of 47.9488 million RMB in 2024 and 7.1456 million RMB in 2025.

Source: Microchip Technology Announcement

Despite the pressure on the target company’s performance, Microchip Technology stated in the announcement: “With the recovery of the storage chip market in 2026, Zhuhai Boya’s revenue is expected to grow significantly, and gross profit margins will increase rapidly. Once the company obtains sufficient operating funds, it is expected to enter a period of rapid growth, with shipment volumes, revenue scale, and gross margins continuing to rise, achieving profitability.”

Regarding the impact of this investment on the company, Microchip Technology said that it is a chip design company centered on MCUs (microcontroller units), aiming to provide one-stop integrated solutions for intelligent control. Earlier this year, the company launched its first SPI NOR Flash, entering the storage product market. The investment in Zhuhai Boya is part of the company’s efforts to further improve and enhance its industrial layout, which will promote its business structure and industry synergy.

Microchip Technology also emphasized that this external investment is made using the company’s own funds and is based on ensuring the normal development of its main business. It will not have a significant impact on the company’s financial condition or operating results.

Looking at its own operations, Microchip Technology’s 2025 annual report shows that the company achieved approximately 1.122 billion RMB in revenue for the year, a year-on-year increase of 23.09%, and a net profit attributable to the parent of about 284 million RMB, up 107.68% year-on-year.

Source: Microchip Technology 2025 Annual Report

Regarding the reasons for the performance changes, Microchip explained that: first, it benefited from continuous R&D investment over recent years and product deployment in high-end application fields, along with ongoing product iteration, new product promotion, sales, and comprehensive service capabilities, leading to rapid growth in shipments of automotive-grade chips and industrial control chips compared to the previous year; second, the promotion of new products and product iteration improved product competitiveness and gross margins; third, the long-term holding of stock in Electric Science & Technology chips saw a rise in stock price, resulting in a significant increase in fair value change gains and losses.

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Cover image source: Sina Finance Media Library